Gary Lauer, chief executive officer of eHealth, stated, "Our second quarterfinancial results illustrate the continued leverage and strength of ourbusiness model. During the second quarter, significant progress was made inmany important areas of our growing business. We added several new carriersand products to our offerings, including an important addition in the stateof Massachusetts, broadened the utilization of eApproval, launched ourpublic eCommerce onDemand (eOD) business in Utah and continued to expandthe presence of our commercial eOD platform."

Second Quarter Results

Revenue -- Revenue totaled $33.4 million for the second quarter of 2009, a22% increase compared to revenue of $27.5 million for the second quarter of2008.

Submitted Applications -- Submitted applications for individual and familyproducts increased 17% in the second quarter of 2009 to 121,100applications, compared to 103,800 applications in the second quarter of2008.

Membership -- Estimated membership at June 30, 2009 totaled 707,100members, a 22% increase over estimated membership of 579,600 at June 30,2008.

Operating Income -- Operating income increased 7% to $6.9 million for thesecond quarter of 2009, compared to operating income of $6.4 million forthe second quarter of 2008. Operating margins were 21% and 23% in thesecond quarters of 2009 and 2008, respectively. Non-GAAP operating incomeincreased 9% to $8.1 million for the second quarter of 2009, compared tonon-GAAP operating income of $7.4 million for the second quarter of 2008.Non-GAAP operating margins were 24% and 27% in the second quarters of 2009and 2008, respectively. Non-GAAP operating income and margins in the secondquarters of 2009 and 2008 exclude $1.2 million and $1.0 million ofstock-based compensation expense, respectively.

Pre-tax Income -- Pre-tax income for the second quarter of 2009 was $7.1million, a 3% decrease compared to pre-tax income of $7.3 million for thesecond quarter of 2008. Pre-tax income was unfavorably impacted in thesecond quarter of 2009 by a decrease in interest income of $0.7 millioncompared to the second quarter of 2008.

Net Income -- Net income for the second quarter of 2009 was $4.0 million,or $0.16 per diluted share. Net income for the second quarter of 2008 was$4.2 million, or $0.16 per diluted share. Non-GAAP net income for thesecond quarter of 2009 was $4.8 million, or $0.19 per diluted share,compared to non-GAAP net income for the second quarter of 2008 of $4.9million, or $0.19 per diluted share. Non-GAAP net income and non-GAAP netincome per diluted share in the second quarter of 2009 exclude $1.2 millionofstock-based compensation expense, adjusted by $0.4 million for estimatednet income tax benefit related tostock-based compensation expense.Non-GAAP net income and non-GAAP net income per diluted share in the secondquarter of 2008 exclude $1.0 million of stock-based compensation expense,adjusted by $0.3 million for estimated income tax benefit related tostock-based compensation expense.

Cash Flow and Cash Balance -- Cash flow from operations for the secondquarter of 2009 was $8.3 million, compared to $8.6 million for the secondquarter of 2008, representing a decrease of 4%.

The second quarter 2008 cash flow statement includes a $3.1 million changein deferred taxes, primarily from the utilization of net operating losscarryforwards, all of which benefited operating cash flow. The secondquarter 2009 cash flow statement includes a $3.0 million cash flow benefitfrom taxes, of which approximately $1.5 million of tax benefit, primarilyfrom the utilization of net operating loss carryforwards, is included incash flow from operations and $1.5 million of net operating losscarryforwards, from the utilization of excess tax benefits related toshare-based payments, is included in cash flow from financing activities.

Cash, cash equivalents and short-term marketable securities as of June 30,2009 totaled $159.8 million, compared to $150.6 million as of December 31,2008.

During the fourth quarter of 2008, eHealth's board of directors authorizeda stock repurchase program of up to $30 million, or ten percent ofeHealth's outstanding common stock, whichever is less. Repurchases pursuantto the program began in December 2008. As of June 30, 2009, approximately412,500 shares of common stock have been repurchased in connection with thestock repurchase program at an average price of $12.69 per share includingcommissions, for a total cost of $5.2 million, of which approximately361,800 shares were repurchased during the six months ended June 30, 2009for a total cost of $4.6 million.

Year-to-Date Results

Revenue -- Revenue totaled $65.4 million for the six months ended June 30,2009, a 22% increase compared to revenue of $53.8 million for the sixmonths ended June 30, 2008.

Operating Income -- Operating income increased 12% to $12.5 million for thesix months ended June 30, 2009, compared to operating income of $11.1million for the six months ended June 30, 2008. Operating margins were 19%and 21% in the six months ended June 30, 2009 and 2008, respectively.

Pre-tax Income -- Pre-tax income for the six months ended June 30, 2009 was$13.1 million, a 1% decrease compared to pre-tax income of $13.3 millionfor the six months ended June 30, 2008. Pre-tax income was unfavorablyimpacted in the six months ended June 30, 2009 by a decrease in interestincome of $1.5 million compared to the six months ended June 30, 2008.

Net Income -- Net income for the six months ended June 30, 2009 was $7.1million, or $0.28 per diluted share, compared to net income for the sixmonths ended June 30, 2008 of $7.5 million, or $0.29 per diluted share.

Cash Flow -- Cash flow from operations for the six months ended June 30,2009 was $13.0 million, compared to $14.5 million for the six months endedJune 30, 2008, representing a decrease of 10%.

2009 Guidance

eHealth is reiterating the following guidance for the full year endingDecember 31, 2009 based on information currently available:

-- Total revenue is expected to be in the range of $131 million to $136 million -- Stock-based compensation expense is expected to be in the range of $5 million to $6 million -- GAAP income tax rate expected to be in the range of 43% to 45% -- GAAP net income per diluted share is expected to be in the range of $0.51 to $0.61 per share

Webcast and Conference Call Information

A Webcast and conference call will be held today, Tuesday, July 28, 2009 at5:00 p.m. EDT / 2:00 p.m. PDT. The Webcast will be available live on theInvestor Relations section on eHealth's website athttp://ir.ehealthinsurance.com. Individuals interested in listening to theconference call may do so by dialing 866-730-5762 for domestic callers and857-350-1586 for international callers. The participant passcode is#42217302. A telephone replay will be available two hours following theconclusion of the call for a period of 30 days and can be accessed bydialing 888-286-8010 for domestic callers and 617-801-6888 forinternational callers. The call ID for the replay is #35408865. The liveand archived webcast of the call will also be available on eHealth'swebsite at http://www.ehealthinsurance.com under the Investor Relationssection.

About eHealth, Inc.

eHealth, Inc. is the parent company of eHealthInsurance, the leading onlinesource of health insurance for individuals, families and small businesses.eHealthInsurance presents complex health insurance information in anobjective, user-friendly format, enabling the research, analysis,comparison and purchase of health insurance products that best meetconsumers' needs. eHealth and eHealthInsurance are registered trademarks ofeHealthInsurance Services, Inc.

eHealth, Inc. was founded in 1997 and its technology was responsible forthe nation's first Internet-based sale of a health insurance policy.eHealth is headquartered in Mountain View, California. Additionalinformation can be found on eHealth's website,http://www.ehealthinsurance.com.

Forward-Looking Statements

This press release contains statements that are forward-looking statementsas defined within the Private Securities Litigation Reform Act of 1995.These include statements regarding eHealth's guidance for total revenue,stock-based compensation expense, GAAP income tax rate, and GAAP net incomeper diluted share for the year ending December 31, 2009. Theseforward-looking statements are inherently subject to various risks anduncertainties that could cause actual results to differ materially from thestatements made, including risks associated with changes and developmentsin the structure of the health insurance system in the United States andhealthcare system reform, eHealth's rate of growth, changes in the economy,weak economic conditions, consumer awareness of the availability andaccessibility of affordable health insurance, changes in member conversionrates and factors affecting conversion, eHealth's ability to continue toincrease its membership base and retain its members, eHealth's ability tomaintain or expand its relationships with health insurance carriers andmarketing partners, negative publicity experienced by eHealth's carrierpartners, changes in products offered on eHealth's ecommerce platform,changes in commission payments or carrier underwriting practices,maintaining and enhancing eHealth's brand identity and the effectiveness ofeHealth's marketing and public relations efforts, system failures, capacityconstraints or data loss, continued acceptance of the Internet as a mediumfor the purchase and sale of health insurance, dependence upon Internetsearch engines, reliance on marketing partners, the pursuit of newstrategies and opportunities in the health insurance market, timing ofreceipt and accuracy of commission reports and related impact on estimatingmembership, payment practices of health insurance carriers, competition,eHealth's operations in China, success in the sale of sponsorshipadvertising and the licensing of the use of eHealth's ecommerce platform,success of the health savings account (HSA) platform, protection ofintellectual property and intellectual property rights claims, legalliability, regulatory penalties and negative publicity, ability to attractand retain qualified personnel, management of future growth, seasonality,impact of future acquisitions, implementation of internal enterprisesystems and maintenance of proper and effective internal controls, impactof employee stock-based compensation expense and provisions for incometaxes, changes in laws and regulations, compliance with insurance and otherlaws and regulations, exposure to online commerce security risks, and theperformance, reliability and availability of eHealth's ecommerce platformand underlying network infrastructure. Other factors that could causeoperating, financial and other results to differ are described in eHealth'smost recent Quarterly Report on Form 10-Q or Annual Report on Form 10-Kfiled with the Securities and Exchange Commission and available on theinvestor relations page of eHealth's website athttp://www.ehealthinsurance.com and on the Securities and ExchangeCommission's website at www.sec.gov. eHealth does not undertake anyobligation to update any forward-looking statement to conform the statementto actual results or changes in expectations.

-- Non-GAAP operating income consists of GAAP operating income excluding the effects of expensing stock-based compensation related to stock options, restricted stock and restricted stock units in accordance with SFAS 123(R) beginning in 2006 and amortization of deferred stock-based compensation expense in accordance with APB 25 for grants made prior to 2006. -- Non-GAAP operating margins are calculated by dividing non-GAAP operating income by GAAP total revenue. -- Non-GAAP net income consists of GAAP net income excluding the effects of expensing stock-based compensation adjusted for estimated income tax benefit related to stock-based compensation expense as well as additional tax expense recorded during the period in accordance with SFAS 123(R). -- Non-GAAP net income per diluted share is calculated by dividing non- GAAP net income by GAAP weighted average diluted shares outstanding.

eHealth believes that the presentation of these non-GAAP financial measuresprovide important supplemental information to management and investorsregarding financial and business trends relating to the company's financialcondition and results of operations. Management believes that the use ofthese non-GAAP financial measures provides consistency and comparabilitywith the company's past financial reports. Management also believes thatthe exclusion of the items described above provides an additional measureof the company's operating results and facilitates comparisons of thecompany's core operating performance against prior periods and businessmodel objectives. This information is provided to investors in order tofacilitate additional analyses of past, present and future operatingperformance and as a supplemental means to evaluate the company's ongoingoperations. Externally, the company believes that these non-GAAP financialmeasures continue to be useful to investors in their assessment of thecompany's operating performance.

Non-GAAP operating income, non-GAAP operating margins, non-GAAP net incomeand non-GAAP net income per diluted share are not calculated in accordancewith GAAP, and should be considered supplemental to, and not as asubstitute for, or superior to, financial measures calculated in accordancewith GAAP. Non-GAAP financial measures used in this press release havelimitations in that they do not reflect all of the costs associated withthe operations of the company's business and do not reflect all of theincome tax as determined in accordance with GAAP. As a result, you shouldnot consider these measures in isolation or as a substitute for analysis ofeHealth's results as reported under GAAP. The company expects to continueto incur stock-based compensation costs described above, and exclusion ofthese costs, and their related income tax impact, from non-GAAP financialmeasures should not be construed as an inference that these costs areunusual or infrequent. The company compensates for these limitations byprominently disclosing GAAP operating income, GAAP net income and GAAP netincome per diluted share and providing investors with reconciliations fromthe company's GAAP operating results to the non-GAAP financial measures forthe relevant periods.

The accompanying tables provide more details on the GAAP financial measuresthat are most directly comparable to the non-GAAP financial measures andthe related reconciliations between these financial measures.

eHealth

At eHealthInsurance, we are strongly committed to protecting your privacy. We do not sell, trade or give away your personal information to anyone. We primarily contact our customers by email. We are not affiliated with other agencies that may contact you by phone.